Construction Employers’ Liability Insurance

Employers’ Liability (EL) insurance is a compulsory class of insurance in the UK. It protects the insured company for claims made against it by employees following injury, disease or death arising from their employment.

There is no direct benefit to the employee from EL insurance, as it protects the employing company. The employee must demonstrate that the employer was either negligent or in breach of a statutory duty and that this gave rise to their injury. The mandatory status of the insurance does mean that companies are obliged by law to affect these policies, providing claimants with some protection in the event of employer insolvency.

The Employers Liability (Compulsory Insurance) Act 1969 came into force on 01 January 1972. From this date it was a legal requirement for most employers to take out this insurance. There has been subsequent legislation but the requirement to insure applies to companies with employees working in the UK for more than 14 days. These companies must take out insurance for a minimum of £5,000,000 per occurrence.

Failure to insure is a criminal offence and offenders can be fined £2,500 for every day they are not properly insured. You may also be fined £1,000 if you do not display your EL certificate (which may be done electronically) or refuse to make it available when asked by an inspector.


Employers liability

Construction is a dangerous activity. If not carefully managed, the risks can result in death or serious injury.

Periodically we review EL insurance claims for UK contractors to identify changing trends. The UK’s largest construction companies participate in this benchmarking exercise. We analyse the financial aspect of this construction risk: the cost of personal injury claims on their employers’ liability (EL) insurance.

Employers liability

Benchmarking allows us to see how this risk changes over time. Each participant’s details are made available to them confidentially.

By doing this, we help individual companies understand their risk performance, which is a key element to improving their risk management.

Key Stats

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Given the duty of care at law that employers have for their employees, employers liability insurance provides the financial protection that when an incident occurs in the work place there is the means to compensate the injured party

  • Employer’s liability (EL) is a compulsory class of insurance in the UK, meaning any business with UK based employees must maintain a minimum of £5m of cover, with the reality being that most business will purchase limits much higher than this.
  • Employers can be fined up to £2,500 for every day that an employer does not have EL cover where they are required to. Additionally, employers can also be fined £1,000 for not displaying, or making readily available electronically, a copy of the current EL certificate confirming the cover in place.
  • Each insurer will have its own definition of employee within their policy wording. Generally speaking, if the employer deducts national insurance and income tax from an individual’s pay, has ultimate control over where and when they work and is providing all the tools and materials for that individual to do their job, they would be classed as an employee.
  • Furthermore for overseas workers coming to the UK temporarily, EL insurance is required for any employee who spends more than 14 days continuously in the UK.
  • Employer’s liability indemnifies the insured for any compensation, costs and expenses they may be legally liable to pay as a result of an injury or illness to one of their employees, which occurs during the course of their employment.
  • Being legally liable in tort normally requires a form of negligence to be proven on part of the employer, however as employers are also vicariously liable for the acts of their employees, if an employee injured another employee this would also be covered.
  • Examples of things that would be covered
    • Injured parties medical expenses,
    • Rehabilitation and retraining costs to get the employee back to work
    • Loss of earnings and loss of potential future earnings
    • Claimants legal costs and expenses
    • Employers legal costs and expenses in defending the claim.
  • While EL will not cover Health and Safety Executive fines, it will cover the legal costs associated with defending the proceedings brought against the employer as a result of a claim.


  • With over half the top 20 UK contractors by turnover as clients, our construction team offer extensive experience with respect to dealing with EL placements in the sector
  • Whether the business requires annual coverage to cover all employees for a group, or project specific cover to satisfy contractual requirements for a particular project, we can assist in implementing a cost effective and comprehensive solution
  • Given our strength in the sector other value added benefits we can provided include:
    • Advice on self-insured retentions to maximise programme efficiency and account for attritional losses
    • Benchmarking in respect of policy limits and general claims trends.
  • Our success comes from focusing on sectors where we know we can make the greatest difference, using insight, intelligence and imagination to provide expert advice and robust - often unique - solutions.
  • We build partner teams to work side-by-side with you, our network and the market to deliver responses which are carefully considered from all angles.
  • A primary point of contact ensures our clients can access a team with the breadth and depth of experience to meet their risk and insurance needs.
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